Silicon Valley Startups Are Getting Funded for the Cred Of the People Behind Them | Adweek Silicon Valley Startups Are Getting Funded for the Cred Of the People Behind Them | Adweek
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A Second Act for Tech Luminaries

Silicon Valley startups are getting funded for the cred of the people behind them

Photo: Jeffrey Coolidge via Getty Images

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The founders of some big successes in digital media have returned to the world of scrappy startups—but not in the traditional way. Instead, they’re launching companies intended to embody the maxim that venture capitalists fund people, not ideas.

Perhaps the clearest example of this strategy is Churn Labs, a company created by AdMob founder Omar Hamoui. As its name suggests, Churn plans to build a series of Internet and mobile products, with the successful ideas spun out as separate companies.

Meanwhile, two of Twitter’s three co-founders, Ev Williams and Biz Stone, have revived their old incubator. Stone has written that Obvious was founded after he and Williams left Google in 2005 as a way to “live our dream—developing multiple projects under one company with nobody to answer to but ourselves.”

For a while, the pair focused on the huge hit that spun out from Obvious (namely, Twitter), but now they’ve left full-time work at Twitter and have returned their attention to the incubator, with a mission to build “systems that help people work together to improve the world.”

Other entrepreneurs aren’t quite following the incubator model, but they’re not focusing on a single idea, either. Kevin Rose, founder of the popular news aggregator Digg, has formed a new startup called Milk, with the goal of building a series of mobile apps. Despite those broader plans, Rose says the company is only focused on one product right now. The seven-person team is small enough that Rose said he doesn’t want to divide it up.

“We want to stay focused on [our first app] Oink,” he said. "Eventually we'll start carving out nights and weekends to work on another product, but right now we're building components of Oink that can be reusable in our future projects."

Another experienced entrepreneur, former Hulu chief technology officer Eric Feng, cited Milk as an example of the model he’s following with his new social networking startup Erly, which plans to release a new app every 60 to 90 days. In general, Feng said startups are created in two ways. Yes, you can have a really great idea. Or you can just create a team that wants to work together and sees a general opportunity, but doesn’t necessarily have a product in mind.

When Rose approached investors, he outlined a few ideas that he wanted to pursue, according to venture capitalist David Sze of Greylock Partners. Sze predicted that once an application really takes off, Milk will have to “burn the boats” and focus.

“They’re not doing this to keep jumping between small ideas,” Sze said. “The point is to do something meaningful.”

Biz Stone: Obvious
Co-founded Twitter out of Obvious. Its newest project is Lift, an app with the goal of “unlocking human potential through positive reinforcement.”


Evan Williams: Obvious
Twitter co-founders created incubator in ’06 to buy back shares in a failed startup. Once Twitter took off, Williams remained as CEO from 2008 to 2010.

Eric Feng: Erly
Former Hulu CTO wants to build social networking apps that are designed around experiences, not people, releasing one every 60 to 90 days.


Kevin Rose: Milk
Digg founder has backing for mobile development startup. First up: Oink, an app promising users they can “vote, rank, and share the world around you.”

Omar Hamoui: Churn Labs
Hamoui, who sold AdMob to Google for $750 million, wants to work on a number of mobile and Internet projects, spinning off the successful ones.